How the FCC’s DVR rules paused innovation: Guest commentary

For the tens of millions of Americans who get their favorite shows and movies over the Internet, futuristic-looking devices have been the norm for years. The Amazon Fire, the Roku 3, and Apple TV boxes all could be props from a sci-fi flick; Google’s Chromecast and Roku’s “Streaming Stick” deliver HD-quality video through devices the size of your pinky finger.

For most cable customers, on the other hand, the set-top box experience may seem like a glimpse of TV’s past more so than its future — the boxes have changed some, but they’re still pretty big and clunky.

It’s not because cable companies don’t know how to build sleek boxes; it’s because they are required to follow special rules and include out-of-date technology in their gear unlike their many competitors. Basically, America’s cable companies are regulated as though Google, Amazon, Netflix and Apple don’t exist.

That’s right. Unlike the companies seeking to supplant them in the marketplace, cable companies have to use set-top devices based on a technology standard from 1998 — probably a time before most of the people reading this column had Internet access.

That standard, known as a CableCARD, contains the security or, as cable customers of a certain age might think of it, “channel scrambling” technology that ensures each customer gets the channels for which they pay — no more or less. For years, this technology was hardwired into a cable box, which is more cost efficient and, over time, could have presumably been wired into smaller and smaller devices — much in the way every other electronic device has packed more power into exponentially smaller cases.

The 1998 rules erected a firewall in the path of that progress. The idea at the time was that the Federal Communications Commission could create a competitive retail market for set-top boxes by forcing cable companies to make their security technology — which is unique to each provider — available to third parties that wanted to build competitive devices. Thus the CableCARD — a device the length and width of a credit card — was born.

The good news was that the CableCARD rules helped spawn devices like the TiVo, which forever changed the idea of “appointment TV” and birthed scores of imitators. The bad news is that the FCC mandate froze the technology of the cable box in time by requiring cable to include CableCARDs in its own boxes — you can’t build a pinky size “cable stick” if it has to hold a massive CableCARD.

Advertisement

This rule is called the “integration ban” — it bans cable companies from integrating their technology into sleek modern devices. Today, most of the services that compete with cable video simply don’t require CableCARDs; they operate online and compete on programming as well as device technology.

To be fair, when the FCC first came up with the integration ban, Google was still a theoretical paper in a Silicon Valley garage and Netflix was still a year away from its founding. Roku did not exist; its founder had just invented the DVR. No one understood that the Internet video cavalry was coming, or that it wouldn’t need CableCARDs to get there.

And today the commission’s outdated mandate is costing consumers billions. Customers renting CableCARD-based boxes have spent over $1 billion since 2007 in increased manufacturing costs. The unnecessary CableCARDs in rented boxes are energy hogs as well, burning nearly 700 million kilowatt hours every year, and piling cost onto consumers’ energy bills. Forced inclusion of the CableCARD prevents cable operators from developing low-cost set-top devices and offering them to families who choose to rent rather than own to save on up-front costs.

And let’s not forget the technological advancements that cable customers may have missed. Freed from the integration ban, there’s no reason a cable “box” might fit inside your remote control or match the lean design that Apple and Roku have pioneered.

Happily, consumers have an unlikely activist in their corner: Congress. Yes, the Congress that has passed less legislation than any other in history is considering modernizing these rules and getting rid of the costly integration ban (but not the CableCARD itself, so rest easy, TiVo users). The bipartisan provision is part of larger telecom bill that has already made it through a House committee and is now in front of a Senate committee on which Sen. Barbara Boxer sits.

Senator Boxer should support this legislation and permit the state’s cable providers to innovate and offer the next generation of exciting technology and apps to consumers in California and elsewhere.

Curtis Symonds is president and CEO of HBCUX, a network devoted to increasing access to news and information about historically black colleges and universities. He is a former executive with Black Entertainment Television.